Brookfield Asset Management and Angel Oak to Enter into Strategic Partnership

Rhea-AI Summary

Brookfield Asset Management (BAM) has announced an agreement to acquire a majority stake in Angel Oak Companies, integrating the firm into Brookfield's $317 billion credit business. Angel Oak, founded in 2008, manages over $18 billion in assets and specializes in U.S. non-agency residential mortgages through its integrated platform.

Angel Oak has demonstrated significant success, having originated more than $30 billion in residential mortgage loans and issued over 60 securitizations. The company combines its wholesale mortgage originator, Angel Oak Mortgage Solutions, with its asset management arm, Angel Oak Capital Advisors.

Under the partnership, Angel Oak will maintain operational independence, with current Co-CEOs Sreeni Prabhu and Mike Fierman continuing their leadership roles. The strategic alliance aims to accelerate growth in serving underserved borrower segments while expanding institutional investor relationships.

Positive

• Strategic integration into Brookfield's massive $317 billion credit business platform
• Access to Brookfield's global presence and institutional investor network
• Proven track record with $30 billion in mortgage originations and 60+ securitizations
• Retention of experienced management team ensuring operational continuity
• Potential for accelerated growth in underserved borrower segments

Negative

• Majority control transfer may affect independent decision-making despite operational independence claim
• Integration risks associated with combining different corporate cultures
• Potential execution risks in scaling operations and maintaining quality standards

Insights

M&A Analyst

Brookfield's acquisition of a majority stake in Angel Oak represents a strategic expansion of its credit platform. This transaction strengthens Brookfield's position in the residential mortgage credit market by adding Angel Oak's $18 billion in AUM to Brookfield's $317 billion credit business.

The deal's value lies in Angel Oak's vertically integrated model that combines wholesale mortgage origination with asset management. This integration creates a competitive advantage by providing Brookfield direct access to mortgage origination capabilities rather than merely investing in mortgage products created by others.

Angel Oak's track record is substantial, having originated over $30 billion in residential mortgage loans and issued more than 60 securitizations. Their focus on underserved borrower segments represents a growth opportunity as traditional lenders continue to maintain tight lending standards.

The retention of Angel Oak's leadership and operational independence suggests Brookfield is taking a hands-off approach, allowing Angel Oak to maintain its entrepreneurial culture while providing resources for expansion. This structure typically maximizes the value of acquisitions while minimizing integration risks.

For Brookfield shareholders, this represents a methodical expansion of capabilities in a specialized credit niche with established cash flows and growth potential.

Financial Strategist

This partnership demonstrates Brookfield's commitment to scaling its alternative credit platform through strategic acquisitions rather than organic growth alone. The move aligns with the broader industry trend of large alternative asset managers expanding their product offerings to attract institutional capital across market cycles.

Angel Oak's specialization in non-agency residential mortgages is particularly valuable in the current market environment. Their focus on borrowers underserved by traditional lenders creates a differentiated origination channel that's difficult to replicate internally. The $18 billion AUM addition may seem modest relative to Brookfield's total platform, but the origination capabilities and specialized expertise are the true strategic assets.

The transaction structure preserves Angel Oak's operational independence while giving Brookfield institutional distribution capabilities to accelerate growth. This arrangement typically allows the acquired firm to maintain its entrepreneurial culture while accessing greater resources – addressing a common failure point in asset management acquisitions.

For institutional investors in Brookfield funds, this expands access to a specialized credit strategy with historically attractive risk-adjusted returns. The residential mortgage market represents a massive opportunity set that requires specialized origination capabilities to access efficiently – precisely what Angel Oak provides.

NEW YORK, April 01, 2025 (GLOBE NEWSWIRE) -- Brookfield Asset Management (NYSE: BAM, TSX: BAM) (“Brookfield”) and Angel Oak Companies (“Angel Oak”), a leading asset manager delivering innovative mortgage and consumer products, today announced that they have entered into an agreement in which Brookfield will acquire a majority ownership stake in Angel Oak and offer its investors access to the firm’s residential mortgage credit strategies. Angel Oak joins Brookfield as part of the firm’s $317 billion credit business, aligning with Brookfield’s broader strategy to partner with best-in-class credit managers alongside its direct investment platform.

Craig Noble, CEO of Brookfield Credit said, “We are pleased to announce our partnership with Angel Oak. Their origination and investment capabilities will be a strong complement to Brookfield’s overall credit offering as we grow our platform. We believe Brookfield can add significant value as Angel Oak looks to build upon its success by both broadening and deepening its relationships with institutional investors.”

Since its founding in 2008, Angel Oak has grown into a premier alternative asset manager with over $18 billion in assets under management, serving both institutional and individual investors. The firm provides differentiated access to U.S. non-agency residential mortgages through a vertically integrated platform that combines its leading non-bank wholesale mortgage originator, Angel Oak Mortgage Solutions, with its asset management business, Angel Oak Capital Advisors. This integrated model, supported by deep market expertise, has resulted in a strong track record of delivering high-quality credit investments. Over the past decade, Angel Oak has originated more than $30 billion in residential mortgage loans and issued over 60 securitizations—a pace expected to accelerate given the growth in borrower segments that are underserved by traditional lenders.

In discussing the partnership, Sreeni Prabhu and Mike Fierman, co-founders and Co-CEOs of Angel Oak, stated, “We are thrilled to partner with Brookfield, whose disciplined investment approach, proven track record of achieving robust long-term growth, and global presence aligns perfectly with our vision. We are particularly impressed with the entrepreneurial spirit that has remained intact at Brookfield as they have become one of the largest alternative asset managers globally. This partnership validates Angel Oak’s proven model and past success, while opening new avenues for growth and innovation in providing clients access to residential mortgage credit. With Brookfield as our partner, we see significant opportunities to scale our integrated asset management and mortgage operations to better serve our clients”.

Angel Oak will continue to operate its business independently, retaining its current leadership, including Prabhu and Fierman as Co-CEOs.

Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Brookfield’s legal counsel. KingsRock Securities LLC, a wholly owned subsidiary of KingsRock Advisors LLC, acted as exclusive financial advisor to Angel Oak, and UBS Investment Bank advised the management team of Angel Oak on this transaction. Paul Hastings LLP acted as legal counsel to Angel Oak.

About Brookfield Asset Management

Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM) is a leading global alternative asset manager, headquartered in New York, with over $1 trillion of assets under management across renewable power and transition, infrastructure, private equity, real estate, and credit. We invest client capital for the long-term with a focus on real assets and essential service businesses that form the backbone of the global economy. We offer a range of alternative investment products to investors around the world — including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. We draw on Brookfield’s heritage as an owner and operator to invest for value and generate strong returns for our clients, across economic cycles.

Brookfield Credit manages approximately $317 billion of assets globally, focused on a broad range of private credit investment strategies, including infrastructure, renewables, real estate, asset backed, and corporate credit. Return profiles span investment grade, sub-investment grade, and opportunistic. The business combines Brookfield’s substantial direct investment platform which has been developed over several decades, with strategic partners, including Oaktree Capital Management, Castlelake, LCM Partners, 17Capital, and Primary Wave Music. As one of the world’s largest and most experienced credit managers globally, Brookfield Credit delivers flexible, specialized capital solutions to borrowers, and seeks to achieve attractive risk-adjusted returns for our clients. For more information, please visit our website at www.bam.brookfield.com.

About Angel Oak Capital Advisors LLC

Angel Oak Capital Advisors specializes in mortgage credit, structured credit and financials credit, managing approximately $18 billion in assets. Backed by a value-driven approach, Angel Oak seeks to deliver attractive, risk-adjusted returns through a combination of stable current income and price appreciation.

About Angel Oak Mortgage Solutions LLC

Angel Oak Mortgage Solutions LLC (NMLS ID #1160240), a leader in alternative lending solutions, is the top nonbank wholesale and correspondent lender of non-QM loans in the nation. Its team of mortgage experts has pioneered a commonsense approach to overcoming today’s mortgage lending challenges. The team, which operates in 46 states and the District of Columbia, offers a breadth of non-QM products that expand the pool of borrowers, giving partners more opportunities to grow their businesses and better serve their customers.

Brookfield Contact Information:
Media:		Investor Relations:
Rachel Wood		Jason Fooks
Tel: (980) 428-3539		Tel: (212) 417-2442
Email: rachel.wood@brookfield.com		Email: jason.fooks@brookfield.com
Angel Oak Contact Information:
Media:		Investor Relations:
Trevor Davis		Randy Chrisman
Tel: (215) 475-5931		Tel: (404) 953-4969
Email: trevor@gregoryfca.com		Email: randy.chrisman@angeloakcapital.com

FAQ

What is the size of Angel Oak's assets under management being acquired by BAM?

Angel Oak manages over $18 billion in assets under management that will become part of Brookfield's credit business.

How many residential mortgage loans has Angel Oak originated since its founding?

Angel Oak has originated more than $30 billion in residential mortgage loans and issued over 60 securitizations since its founding in 2008.

Will Angel Oak's management structure change after BAM's majority stake acquisition?

No, Angel Oak will continue to operate independently with current Co-CEOs Sreeni Prabhu and Mike Fierman maintaining their leadership roles.

How does Angel Oak fit into BAM's existing credit business?

Angel Oak will become part of Brookfield's $317 billion credit business, complementing their platform with residential mortgage credit strategies.

What is Angel Oak's core business model under BAM ownership?

Angel Oak operates a vertically integrated platform combining wholesale mortgage origination through Angel Oak Mortgage Solutions with asset management via Angel Oak Capital Advisors.